Friday, April 1, 2011

First in birth order and educational outcomes

One of the most compelling arguments about the harmful impact of inequality (despite all social protections and welfare measures) comes from analysis of college enrollment. Economix used data from the Chronicle of Higher Education and examined the share of students at various elite colleges who are Pell Grant recipients (the largest financial-aid program in US, which tend to go to students who come from the bottom half of nation’s income distribution), and writes,

"In 2008, the most recent year in the Chronicle’s data, a mere 6.5 percent of Harvard students received Pell Grants. And Harvard wasn’t all that unusual among elite colleges. At Washington University in St. Louis, only 5.7 percent of students received Pell Grants. At the University of Pennsylvania, the share was 8.2 percent. At Duke and Northwestern, it was 8.3 percent. At Notre Dame, it was 8.4 percent. The numbers at Yale (8.9 percent), and Princeton (9.9 percent) were also fairly low. The share at Stanford was 12 percent... To put it another way, do you believe that more than 93 percent of the students who are most deserving of attending the nation’s most prestigious, best financed college come from the top half of the income distribution?"

This assumes significance since graduates from these elite universities enjoy a premium in the job market and dominate influential positions in both private and public sectors. This is yet another evidence of the role of the ovarian lottery in deciding life outcomes.

Update 1 (26/5/2011)

Excellent article by David Leonhardt that chronicles how the top American Universities have a disproportionately low number of students from the low-income groups. If at the top places, two-thirds of the students come from the top quartile and only 5 percent come from the bottom quartile, then the Universities are actually part of the problem of the growing economic divide rather than part of the solution.

Update 2 (5/1/2012)

Family background plays more of a role in the US than in most comparable countries. A project led by Markus Jantti has found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults, a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent). Just 8 percent of American men at the bottom rose to the top fifth compared to 12 percent of the British and 14 percent of the Danes. About 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths.

However, Middle America remains fluid. About 36 percent of Americans raised in the middle fifth move up as adults, while 23 percent stay on the same rung and 41 percent move down, according to Pew research. The "stickiness" appears at the top and bottom, as affluent families transmit their advantages and poor families stay trapped.

Update 3 (10/1/2014)

Robert Frank on the vicious circle of income inequality. Not only do people stay rich and poor respectively, but also the likelihood of the rich falling to poverty diminishes.